Ownership is a very big factor for a business and the United Arab Emirates is working towards this. In the year 2019, the cabinet of the United Arab Emirates approved a positive list according to which 100 percent Foreign Direct Investment is allowed in certain sectors but the company should be outside the free zone. this move will rewrite the business landscape in the United Arab Emirates.
This Cabinet Decision should be read with great attention as it does not explicitly state that 100 percent of foreign ownership will be unconditionally provided. According to the cabinet resolution, up to 100 percent ownership can be provided only in certain specific sectors that too after fulfilling certain conditions as set at the emirate level by the concerned authorities.
Let us understand what a positive list is.
According to article '2' of Cabinet Resolution No. 16 of 2020, a positive list is a list of economic activities or economic sectors in which any foreign investor is allowed to invest. The positive list includes sectors and activities under which 100 percent ownership in the companies was permitted. There were many conditions that had to be fulfilled by the investors. One of the conditions was that the company should be outside the jurisdiction of any of the free zones.
The list is very comprehensive and includes many key sectors such as manufacturing, agriculture, storage, hospitality, communications, the technology sector, and many others. The list also includes such as sporting goods, consultancy services, hotels, restaurants, construction services, music bands, and many others.
This list will be applicable to all the sectors and businesses mentioned in the cabinet resolution from 1 December 2020. Before the cabinet resolution, it was necessary for all the businesses to have a sponsor from the United Arab Emirates.
Effects of the Cabinet Resolution
This can be considered as a landmark decision from the side of the UAE Government and there will be a big change in the business landscape in the UAE. This resolution is applicable to most of the sectors in the country except those sectors which are considered of strategic importance. This includes sectors such as transport, hydrocarbons, and telecommunications.
Due to this reform from the side of the UAE Government, there is an expectation of a huge increase in Foreign Direct Investment, especially in Abu Dhabi and Dubai. Abu Dhabi and Dubai are already considered as a business and financial hubs for the world and with such development, these cities will grow further and will attract people and businessmen from all over the world.
Need for Professional Accounting and Auditing Services
With an increase in business prospects in the UAE, there will be more number of businesses coming in from all over the world. With the increasing number of businesses, the need for various financial services for businesses such as Accounting and Auditing will also increase.
To make the most of the situation, a company should always avail of such services from professionals. The professionals are experts in the financial domain and will provide the best services to the companies which will help in the growth and development of the company.
How can JAXA Chartered Accountants can be of Assistance?
If you are in need for Accounting and Auditing services for your company in the United Arab Emirates, then JAXA Chartered Accountants can help you in this matter. JAXA is a reputed firm in the UAE and is also an ISO 9001:2015 certified company. The experts at JAXA will understand your requirements and will provide the services accordingly.
JAXA Chartered Accountants also provide a number of other services such as VAT and Tax related services, Payroll related services, and many others. Do have a look at all the services provided by JAXA and in case of any queries that arise feel free to Contact Us. We will be happy to answer all your queries.